You, me and HMRC

Posted: January 24, 2007

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Introduction
At the end of his judgment in the case of Jones v. Garnett  Park, J., said, 'I have given judgment at some length because there is widespread professional interest in this case, but I do not think that there is anything particularly novel or alarming in my decision. I believe that it is a simple application of well-established principles. Applying those principles, I dismiss the appeal.'  Having come to exactly the opposite conclusion, at the end of his judgment in the Court of Appeal Carnwath, L.J., said, 'The lack of a clearly ascertainable legislative purpose underlines the need for caution in extending the concept of settlement beyond the scope of existing jurisprudence. The revenue's position in this case seems to me a significant extension.'  So clear were the judges in the Court of Appeal that their conclusion was the right one that they refused leave to appeal. So doubtful were the Appeal Committee of the House of Lords that they granted leave to appeal. So the judgment of the House of Lords is awaited on this 'simple application of well-established principles'. But the difficulties in this area make it likely that as many problems will be created as will be solved, no matter what their Lordships say. Absent the political will for more fundamental reform of the tax system,  it may take a good deal of litigation to achieve some clarity.

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